PROTECTION OF INTELLECTUAL PROPERTY RIGHTS IN FRANCHISE As presented by ASHRAF EL MOTEI Asharqia Chamber, Dammam, KSA May 2012 P.O. Box Dubai, UAE Tel: Fax: Website:

FRANCHISOR INTELLECTUAL PROPERTY RIGHTS PART I: FRANCHISOR ITELLECTUAL PROPERTY RIGHTS (IPR) 1. General Definition 2. Franchising and IPR 2.1 Importance of IPR in Franchising  What does IP include?  Branches of IP

FRANCHISOR INTELLECTUAL PROPERTY RIGHTS 2.2. Need for Protection of IPRs of Franchisors Importance of Protection:  Time, Effort and Money Spent  Provides Effective Insurance for Franchisor  Assurance to Potential Franchisees  Advances in technology  Employee mobility and shifting allegiance Consequences of Non-Protection  Setting up of Competitive Companies by Employees  Misuse of generic or not sufficiently distinctive

FRANCHISOR INTELLECTUAL PROPERTY RIGHTS 3. Key Elements that require protection in Franchisor’s IPR 3.1 Goodwill  Concept  Benefits of Franchisor’s Goodwill to Franchisee  Its importance for consumers 3.2 Confidential Information  Its Meaning  Essential requirements to prove trade secrets  Ways of protecting confidential information

FRANCHISOR INTELLECTUAL PROPERTY RIGHTS 4. Means of Protecting Franchisor’s IPR 4.1 By means of a Well Drafted Franchise Agreement  Important points to be included in Franchise Agreement 4.2 By Additional Means  Design active trade mark protection program  Exercise care in registration of the copyright in a franchisor’s operations manual  Signing of Covenants  Setting up of an Offshore Company

SETTING UP AN OFFHORE COMPANY IN U.A.E. PART II: OFFSHORE COMPANY 1. Going Offshore: Reasons & Benefits 2. Setting Up an Offshore Company to hold IP Rights 3. UAE OFFSHORE JURISDICTIONS 4.1 Jebel Ali Offshore (JAFZA) 4.2 Ras Al Khaimah Offshore (RAKIA)

SETTING UP AN OFFHORE COMPANY IN U.A.E A. WHY GO OFFSHORE? Offshore Companies (or Non-Resident Company) are used to mitigate taxes. Residents of countries with high tax rates may be able to reduce the tax they pay by arranging for profits to be attributed to a company incorporated in a territory which doesn’t tax the income earned outside of the territory. Offshore Companies are mainly used in Trading, Services, Property Owning and Shipping. OFFSHORE COMPANIES

SETTING UP AN OFFHORE COMPANY IN U.A.E Going Offshore: Reasons & Benefits  Maintain financial privacy  Banking privacy  Reduce tax  Free remittance of profits and capital  Security of property rights  Access to foreign insurance and reinsurance  Foreign investment inducements  No inheritance, succession or gift taxes  Reduce legal liabilities  Freedom from currency exchange control  No international trade tariffs OFFSHORE COMPANIES

SETTING UP AN OFFHORE COMPANY IN U.A.E The principal uses of offshore companies are:  Trading  Investment  Holding  Financing  Trademark, patent, royalty and copyright holding  Real property ownership  Ship management and yacht owning  Personal and corporate tax planning OFFSHORE COMPANIES

SETTING UP AN OFFHORE COMPANY IN U.A.E Setting Up an Offshore Company to hold IP Rights  Concept of Restructuring  Its Advantages  Mitigation of Double Taxation  Payment of Royalties by Associated Companies OFFSHORE COMPANIES

SETTING UP AN OFFHORE COMPANY IN U.A.E B. Jebel Ali Offshore (JAFZA) Features:  No tax  Easy procedures for incorporation and transfer of shares  The UAE is considered a Schedule 3 FATP jurisdiction and complies with the relevant anti money laundering regulations  The UAE has an extensive and growing list of double tax treaties, which currently numbers 52 countries. This network includes treaties with China, France, Germany, India, Indonesia, Italy, Luxembourg, Malta, Malaysia, the Netherlands, Singapore, South Korea  Jebel Ali Offshore Companies can hold an account in a bank within and/or outside the UAE for the purpose of conducting routine operational transactions  Jebel Ali Offshore is not on the OECD “blacklist” of tax havens (nor the FATF blacklist) UAE OFFSHORE JURISDICTION

SETTING UP AN OFFHORE COMPANY IN U.A.E C. Ras Al Khaimah Offshore (RAKIA) Features:  No Tax  No foreign exchange controls, trade barriers or quotas  Easy procedures for incorporation and transfer of shares  RAKIA Offshore is not on the OECD “blacklist” of tax havens (nor the FATF blacklist)  Double Taxation Treaties: Double taxation agreements prevent individuals and corporations from being susceptible to paying tax on the same item during the same time period. These agreements determine which of the two states concerned should levy tax in a particular situation  can hold an account in a bank within and/or outside the UAE for the purpose of conducting routine operational transactions UAE OFFSHORE JURISDICTION

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